If you are a trader, you love volatility, if you are an investor, you love a bargain and can wait till the investment achieves full value. One is not better than another, although traders typically have to deal with more losses than investors. Investors try not to lose money, if you are a trader, if you never lost money you are lying. However, some of the gains can be exceptional. Who is benefiting from energy volatility?

In an article by Shadia Nasralla, Stephaine Kelly and Dmitry Zhdannikov of Reuters, the trading desk of Europe’s top 3 oil major companies have reaped billions from the energy supply crunch caused by the Iran war.

Together, the trading desks at BP, Shell and TotalEnergies made about $2.5 billion in the first quarter according to Reuters calculations based on information from sources at each company.

All the sources asked not to be named as oil companies do not disclose detailed trading results, which they consider strategically sensitive.

European majors have spent decades building trading desks, employing hundreds of people who buy and sell crude, fuels and gas to take advantage of price gaps across regions and time periods, while also taking positions in derivatives markets.

US majors ExxonMobil and Chevron, mainly use traders to optimize flows within their own networks of production, refineries and fuel retail outlets. That approach prioritizes predictability, but limits opportunities to profit from extreme market moves.

David Hewitt, senior consultant at Hewitt Energy Perspectives, said BP is given to hyperbole, so calling its results exceptional is telling.

All 3 European majors, expect to report higher earnings which will counteract the shut in production from the war.

Linking to dividend paying stocks, in an industry all the companies do the same thing, but they profit differently and that is where you homework comes in. In the above case, volatility means greater profits to European oil majors, while consistent prices means greater profits for American majors. How does your investments make money through every cycle is the issue you want to know.

There are more questions than answers, till the next time – to raising questions.